Market Outlook

Singapore
Furniture Market
Outlook 2014

Madam Song Mei Yong, President of
Singapore Furniture Ass ociation (SFA)
shares her review of the Singapore
Furniture market in 2013 and the
outlook for 2014.

Madam Song Mei Yong, President of
Singapore Furniture Ass ociation (SFA )
shares her review of the Singapore
Furniture market in 2013 and the
outlook for 2014.

REVIEW OF 2013
With a total turnover of approximately S$1billion
per year, the Singapore furniture market pales
in comparison with many other nations. For
example, Ashley Furniture, the largest furniture
chain in the America has an annual turnover of
US$5.6 billion, or about S$6.7 billion. QuanYou,
one of China’s largest furniture company,
has an annual turnover of about S$2billion.
In comparison to these figures, the scale of
Singapore’s local market becomes obvious.
Our national market size is dwarfed by one
individual company.

One of the reasons for Singapore’s small
furniture market is due to the average national
expenditure on home furniture as well as its
small population and country size. The average
expenditure per annum on furniture is slightly
lesser than S$200. Contrast this with America
where the average expenditure is S$330, coupled
with those reasons listed above and it becomes
clear. It is not surprising to find old and dated
furniture which has been used for years even in
the homes located in high end residential areas.
The key point is the Singapore consumers’
mindset towards furniture - generally cautious
and conservative in nature.

Fortunately, being a cosmopolitan city, about
37% of its residents are from overseas, which
is similar to other major cities such as New
York and London. These new immigrants have
helped to cushion our furniture market from
shrinking.

In the past year, especially so during the second
half as the property prices began to fall, this
culminated in the end of the price growth
momentum since 2009. Volume of property
sales has also declined, particularly in HDB
flats, dwelling of most of our citizens. The
volume of resale flats has dropped by 32% as
compared to 2012, and this had a major impact
towards the furniture market. The drop in sales
of furniture by 4% to below S$1 billion can be
attributed to the decline of the property market.

Outlook for 2014
What is the prospect for 2014? To be honest, I
would be a little cautious regarding the year’s
outlook. For reasons such as the effect of
government’s property cooling policies as well
as the overall reduction in the supply of HDB
flats. Looking at it from the surface value, we
expect a reduction of only 3%. However, upon
in-depth analysis, the larger flats (3-room and
above) will be reduced by 18% and there will be
an increase in 2-room flats. Taking all these into
consideration, the outlook does not seem too
promising for our furniture sector.

Yet on the other hand, the cost of operations
is expected to increase which will further
complicate matters. First of which is the ever
increasing rental costs in Singapore. At more
than S$10psf, it is very costly for furniture
retailers especially when compared to other
countries like America. As our rental rates
are mainly controlled by a few large firms, and
not to mention our small market size and high
expenses, profits are increasingly harder to
achieve. Therefore, it is time for the furniture
trade to think out of the box regarding our
business model.

At the moment, SFA is exploring this area of
evolving business model to aid our members.
We hope to gather the support of the industry
once the plan has materialized.

In 2013, SFA collaborated with Small and
Medium Enterprise Centre to organize seminars
for our members to introduce the Work-Pro and
Flexi Work schemes. We believe that many
members have benefitted from the schemes and
further assistance are available to members.
SFA has also appealed to the government
through SCCCI to extend a Productivity and
Innovation Scheme for another three years and
also to simplify the claims processes.

In summary, SFA will continue to play its
important role to:

- help members to better understand and
tap on government assistance measures.
Members can participate in seminars
organized by SCCCI to help them to take full
advantage of these measures.

- help members to thrive in their business in
the Furniture Mall and at APFF exhibitions
by continuing to increase marketing and
advertising activities to improve the traffic
flow to these venues.

- help members to keep up to date with new
business models such as O2O (Online-to-
Offline). It is inevitable that we need to look
into e-commerce platforms which are the
current phase of evolution in retail industry
as online shopping will continue to grow.

- help members to explore global opportunities
which are available even in the current
downturn, so as to generate new sources
of revenue and to remain competitive. In
conjunction with the Council of Asia Furniture
Associations (CAFA), members can now
have the opportunity to have exhibition and
retail space in overseas market at special
concessionary rates.

Officially established in 1926, Chinese
Furniture Dealer’s Association was renamed
SINGAPORE FURNITURE ASSOCIATION
(SFA) in 1995 to reflect its enlarged role as an
effective representative body of the furniture
retailers, manufacturers and traders. It has
grown from strength to strength, to date SFA
serves a membership strength of more than
100 members in the furniture and furnishings
industry.

With its mission to promote the development
and growth of the local furniture and
furnishings industry, SFA strives to
elevate the standards of integrity and
professionalism amongst its members so
as to achieve excellence in service and
quality of products to meet the demands
and expectations of consumers and society
at large. Besides promoting businesses,
the association also seeks to promote
camaraderie amongst members through the
association’s activities.

There are two distinct and highly successful
platforms developed by SFA to help its
members, namely The Furniture Mall and
Asia Pacific Furniture Fair Pte Ltd.

The Furniture Mall concept was mooted
by the SFA to find a long term solution for
members to succeed in an increasingly
costly and competitive environment due
to the influx of big furniture stores into the
local market. The Furniture Mall is the onestop
destination to offer the widest array of
quality furniture, furnishing items and interior
design services to satisfy different furnishing
needs and preferences.

Asia Pacific Furniture Fair Pte Ltd (APFFPL)
was set up by the SFA with its aim in
organising exhibitions to provide participating
Singapore Furniture Association members a
convenient and effective one-stop venue to
market their high quality and well-designed
furniture to the local consumers.

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